Who should pay for the maintenance of exclusive use areas in a sectional title scheme?
Q: Where in the Sectional Titles Schemes Management Act or the regulations does it say that the body corporate pays half of the cost of maintenance in respect of exclusive use areas (EUAs)? I have been advised that according to the act, the body corporate (the trustees) must recover an additional contribution from the owners who are holders of the rights of exclusive use to defray the expenses associated with EUAs, and that these costs include insurance, rates, maintenance and repairs. But our managing agent says the body corporate must pay 50% and the owners with the EUAs must pay the other 50%. Is this accurate? — Name withheld
A: Andrew Schaefer, the MD of property management company Trafalgar, responds:
An EUA is not part of an owner’s section but a special category of common property — which suggests that the body corporate should always be responsible for its maintenance and for the associated maintenance supervision, but this is not always the case.
What’s more, though the relevant legislation does provide for the body corporate to recover the costs of that maintenance — in most cases — by way of an EUA levy. There is no provision for exactly how this charge should be calculated, or that only 50% of the maintenance costs for the EUA should be recovered from the owner concerned.
To resolve this issue, one must first look at how a specific EUA was created, so as to determine who is responsible for its maintenance:
- If the EUA was created in terms of the original sectional title plan for the scheme, then the body corporate is responsible for maintenance and the owner must pay an exclusive use levy to cover the costs of that maintenance;
- Similarly, if the EUA was created in terms of the specific rules of the scheme, and those rules don’t specify anything about maintenance, then the body corporate will be responsible for maintenance and must recover an EUA levy;
- However, if the EUA was created in terms of the rules of the scheme and these rules stipulate that the owner is responsible for maintenance, the body corporate cannot recover an EUA levy.
The second thing to do, in cases where an EUA levy is payable by the owner, is to work out how this should be calculated. In practice, the total annual maintenance, rates and insurance costs for the EUA should be quantified to justify a monthly charge raised on the levy account.